Humans have an inherent need to make sense of their environment and attempt to do so by categorising everything around them.

In theory this provides structure and substance and is a behaviour that has resulted in a name for almost every animal, plant, rock formation, cloud and in the business world – customers.

For the latter group, attempts at categorisation are not just so companies can get to know their customers in order to service them better – they also do it to get as much of their business as possible.

Financial services companies are slowly starting to do this more – mining the vast pools of data they have on clients.

The problem is that it’s an industry still learning how to talk to its clients in a meaningful way, which is something that for the main part they are forced by law to do at least twice a year.

The essence behind customer segmentation is it allows a business to start to group the market into discrete customer groups that share similar characteristics.

The habit for financial services businesses all around the world has been to group them by life stage – in the theory that its life stage that drives purchasing patterns.

For instance, the accepted notion that people in their 30’s buy mortgages and insurances, save into super, but don’t think about it and that somewhere magically in their mid to late 40’s superannuation springs to mind.

To be honest this isn’t new and there are financial services business all over the world that are literally brilliant at managing it.

American Funds Management collected so much data on their clients they were able to record children’s birthdays, mapping likely college dates, car insurance dates, savings plans and indeed funeral savings plans and then manage to follow it up, sending cards and product suggestions at the appropriate times in their client’s lives.

There is abundant marketing literature, indeed there is abundant psychiatric literature, that suggests the surest guide to a person’s behaviour in the future is to assess their past behaviour.

With this rationale it seems odd that most financial services businesses do not map their customer’s psychographic behaviour – to try and understand what motivates and rewards their customers.

Critically there are three core behaviours which categorise the customers of most businesses – Controllers, Externalisers and Worriers.

Controllers, who generally make up about 20% of a customer base and are often the most wealthy and need data in their communication to ensure their satisfaction.

Externalisers, who make up about 30% of the population need to find a way to be rewarded for their choice of fund manager, financial planner or superfund in their communication.

Meanwhile worriers, who make up about 50% of the market, need to find security in their communication to be rewarded. The problem for most companies is that each of these psychographic groups want different things from their business.

Some businesses have established themselves in behavioural segments completely by accident and are very good at satisfying one or more of these segments.

The stand outs in the area in Australia have been the direct businesses – which are in the main made up by consumers that fit neatly into the controller and externaliser segment.

However, some of the biggest challenges for larger businesses in Australia is that their databases are clogged with groups from each of these psychographic profiles, none of whom is being satisfied, or indeed communicated to in a way which is valued by all of them.

In truth it’s hard for businesses to break down their communications to allow them to talk to effectively to everyone in their database, but there are clues which might help them.

For a start, in some cases it’s as simple as looking at which people have been attracted to the aggressive products or asset allocations on offer, or which are attracted to the more exotic or esoteric products.

The reality of this is that the competition is starting to segment the market already – in fact some of the newest players are building their business on segmentation.

The big challenge in financial services in the future may not come from traditional players, but from areas which have set themselves up as systems for making better and smarter choices.

Online-search giant Google it seems may be the new player in financial services, providing choice and information on a scale never previously imagined.

Already the business boasts Froogle, a search engine designed to allow people to choose and compare prices on items for sale all over the world.

How long before they offer a service which allows customers, at an instant to examine the performance, service and likely future or a product at an instant and effectively allow the customers to segment themselves?